Pound Sterling (GBP)
GBP: The British Pound is likely to stay firm in the near term, helped by the Bank of England’s careful approach and relatively balanced market positions. Although recent economic reports have been underwhelming, much of that weakness is already priced in. The Pound could still gain support from global risk appetite and weaker rival currencies, but worries about tax increases and structural challenges continue to weigh on its longer-term outlook
Euro (EUR)
EUR: The Euro managed to recover after an early dip caused by French political uncertainty and weak German sentiment. Support came from an improved market mood and the currency’s tendency to strengthen when the U.S. Dollar softens. While German economic data sent mixed signals, higher inflation reduced fears of sharp rate cuts. Investors are now waiting for fresh Eurozone data to see if the Euro can hold its ground or face new downward pressure.
U.S. Dollar (USD)
USD: The U.S. Dollar stayed on the back foot as expectations grew for the Federal Reserve to cut rates in September, driven by weak economic numbers and cautious comments from Chair Powell. Markets are now focused on Friday’s U.S. jobs report for signs of further labour market slowdown. Despite inflation coming in hotter than expected, the Dollar remains under pressure due to improving risk sentiment and political debates around Fed independence.